Micro Lending Program
Assisting the Families of Thulipokhari, Nepal
A project of Soroptimist International of Truckee Meadows, Sierra Nevada Region, SIA
In 2003 SITM introduced a Micro Lending Program for villagers in Thulipokhari to fund small loans for families to purchase animals to assist in agriculture, improve nutrition and provide a source of income. Water buffaloes are used to till the fields and haul materials. They also provide protein-rich milk and fertilizer for the crops. Goats provide milk and food, chickens provide eggs and bee hives provide pollination of crops plus honey. All excess production is sold, providing needed funds to repay the loans and improve the family standard of living.
Based on input from the village, SITM expanded the Micro Lending Program to include loans for Vital Seeds. This program,primarily run by women, has underwritten loans for vegetable seeds never before available in Nepal. It has introduced tomatoes, cabbage and cauliflower to an existing diet consisting primarily of rice and lentils. Benefits of the Micro Lending program include helping to alleviate widespread hunger, while the sale of excess meat and produce is helping to create a vibrant economy that has never existed in this area.
- Over 100 families have participated.
- Scholarship recipients and families in the village now have balanced nutritious daily meals. Prior to this their meals consisted of primarily of rice and lentils and many were malnourished.
- Interest from the loans helps support the dormitory for female students.
- The program encourages entrepreneurship, especially among the women.
- No loans have defaulted
How It Works
SITM provides funds to a village committee in Thulipokhari, that is charged with the administration of the micro-lending loans. These loans are given out based upon the priority as set by the village committee, with two conditions set by SITM. One, that preference be given to women, and two, that no cast members be excluded based upon their caste – all castes should receive loans. SITM does not choose the membership of the committee. However we do request that at least one women be a part of the committee at all times.
The loans are made for the amount that is approved by the committee, based upon the proposed use of the money. For instance, if the lender wishes to purchase a water buffalo, they are loaned money specifically for that purpose. The village committee determines the length of the loan.The interest rate is the same for all loans in the same time frame. Currently the interest rate on these loans is 12% (it would be 60% if obtained from lenders in Nepal).
Interest from the loans is used for support and maintenance of the girls dormitory, plus board, and scholarships. The corpus of the loan when repaid in full, is placed in the bank account and made available for new loans, based upon the decision of the village committee, still following the conditions previously set by SITM.
Mother’s Groups – the driving spirit for the program
The Mother’s Groups are a loosely organized group who live in a particular neighborhood in Thulipokhari, Nepal. They have been organized to work with micro-lending individuals, work on their own Mother’s Group entrepreneur projects (for instance the Goat Farm), and are the base group for the SITM Women’s Literacy Project, funded by a Grant from Soroptimist International- Educate to Lead President’s Appeal Program (2014-2018)
The distribution of money for loans requires two signatures to withdraw the funds from the bank and are normally provided to the recipient in cash, as many villagers do not have bank accounts. The committee appoints one of their members to keep a written ledger of accounts and records all loans and payment received from those loans.
SITM monitors the program in two ways. One by looking at “how far” the scholarship funds we send each year go toward the upkeep of the dormitory, board for the girls (food), enhancements, and the number of female students who are receiving scholarship assistance. We know that more students are getting assistance than we send designated funds to provide. Th interest income earned on the micro-lending enhances what we send each year for scholarships. Secondly, we review spreadsheets for the loans and compare it to what we know via personal visits, photographs of the animals, crops, shelters and other micro-lending projects we are supporting.
Want to Help?
To support our vision of education for girls in Nepal SITM holds an annual Pledge Drive in March (although you can donate any time). Donors may designate their contribution to the micro-lending project. The amount SITM sends each year is determined by the amount raised from donations.
For more information contact SITM or write to us at P.O. Box 20125 Reno, NV 89515.